No. 16-712

In the

Supreme Court of the United States

On Writ Of CertiOrari tO the United StateS COUrt Of appealS fOr the federal CirCUit

OIL STATES ENERGY SERVICES, LLC,

Petitioner,

v.

GREENE’S ENERGY GROUP, LLC, et al.,

Respondents.

BRIEF OF AMICUS CURIAE PROFESSOR LEE A. HOLLAAR IN SUPPORT OF RESPONDENTS

276682

WIllIam R. hubbaRd

Counsel of Record Womble CaRlyle SandRIdge

& RICe, llP1200 Nineteenth Street, NW,

Suite 500Washington, DC 20036(202) 857-4508will.hubbard@wcsr.com

Counsel for Amicus Curiae

1

TABLE OF CONTENTS

TABLE OF CONTENTS ....................................................... 1 TABLE OF CITED AUTHORITIES ..................................... 3 STATEMENT OF INTEREST OF AMICUS CURIAE ......... 7 SUMMARY OF THE ARGUMENT ..................................... 8

ARGUMENT ....................................................................... 10

I. The question on which certiorari was granted is

misleading. ....................................................................... 10

II. Patent rights inherently contain the same limitations

Petitioner contends conflict with patent protection. ......... 15 a. Congress set forth a patentee’s rights in § 261, and

they are subject to the other provisions of Title 35. ..... 15

b. Title 35 establishes cancellation through

administrative proceedings with review by Article III

courts. ........................................................................... 16 c. Congress can provide that patents issue with

administrative claw-back provisions. ........................... 21

d. Patentees choose to elect patent protection that

includes limitations, including those Petitioner now

attacks. .......................................................................... 22 III. This Court should not disturb Congress’s calibration

of patent law. .................................................................... 23 a. Because examination is an inherently imperfect

process, there is a need to review a patent based on

information not available to the examiner. ................... 24 b. Congress has chosen inter partes review over

other approaches that would hurt applicants and holders

of valid patents. ............................................................ 26 c. The “bugs” claimed by the critics of inter partes

review are features of patent law created by Congress. 28 IV. Petitioner has failed to address and thus waived

important issues related to its case. .................................. 32 a. Petitioner has not specified what portion of Title 35

is unconstitutional. ........................................................ 32

2

b. Petitioner has not addressed whether its challenge

is limited to retroactive applications of inter partes

review. .......................................................................... 36 V. If the Court finds for Petitioner it should provide

clear guidance. .................................................................. 40 a. If necessary, the Court should address the impact of

a finding for Petitioner on other aspects of the Patent

System. ......................................................................... 40

b. If necessary, the Court should provide guidance to

Congress. ...................................................................... 42

CONCLUSION .................................................................... 43

3

TABLES OF CITED AUTHORITIES

Cases

Blonder-Tongue Laboratories, Inc. v. University of

Illinois Foundation,

402 U.S. 313 (1971) ...................................................... 14

Brockett v. Spokane Arcades, Inc.,

472 U.S. 491 (1985) ...................................................... 33

Cuozzo Speed Techs., LLC v. Lee,

136 S. Ct. 2131 (2016) ................................................. 12

Diamond v. Diehr,

450 U. S. 175 (1981) ..................................................... 24

Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki

Co.,

535 U.S. 722 (2002) ........................................................ 8

Gottschalk v. Benson,

409 U.S. 63 (1972) ........................................................ 26

Graham v. John Deere Co.,

383 U.S. 1, 17 (1966) ............................................. 12, 13

Halliburton Oil Well Cementing Co. v. Walker,

329 U. S. 1 (1946) ......................................................... 26

HP Inc. v. MPHJ Tech. Inv., LLC,

817 F.3d 1339 (Fed. Cir. 2016) .................................. 13

In re Cuozzo Speed Techs., LLC,

793 F.3d 1268 (Fed. Cir. 2015) .................................. 12

In re Hall,

781 F.2d 897 (Fed. Cir. 1986) .................................... 25

Kappos v. Hyatt,

132 S.Ct. 1690 (2012) .................................................. 18

4

Markman v. Westview Instruments, Inc.,

517 U. S. 370 (1996) ............................................... 12, 26

Medtronic, Inc. v. Mirowski Family Venture, LLC,

134 S. Ct. 843 (2014) ................................................... 15

Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd.,

545 U.S. 913 (2005) ........................................................ 9

Microsoft Corp. v. i4i Ltd. Partnership,

564 U. S. 91 (2011) ....................................................... 29

Ruckelshaus v. Monsanto Co.,

467 U.S. 986 (1984) .......................................... 37, 39, 40

Teva Pharm. USA, Inc. v. Sandoz, Inc.,

135 S. Ct. 831 (2015) ................................................... 12

Triplett v. Lowell,

297 U.S. 638 (1936) ...................................................... 15

United States v. Sherwood,

312 U. S. 584 (1941) ............................................... 41, 42

Constitutional Provisions

U.S. Const. Art. I, § 8, cl. 8 ....................................... 22, 44

Statutes

15 U.S.C. § 1063 ............................................................... 28

28 U.S.C. § 1498 ............................................................... 42

35 U.S.C. § 112............................................................ 23, 26

35 U.S.C. § 135............................................................ 18, 19

35 U.S.C. § 135 (2009) ..................................................... 18

35 U.S.C. § 141.................................................................. 18

5

35 U.S.C. § 145.................................................................. 34

35 U.S.C. § 146............................................................ 18, 34

35 U.S.C. § 154.................................................................. 23

35 U.S.C. § 203.................................................................. 23

35 U.S.C. § 261.................................................................. 36

35 U.S.C. § 282............................................................ 14, 29

35 U.S.C. § 301...................................................... 19, 20, 39

35 U.S.C. § 302.................................................................. 19

35 U.S.C. § 303...................................................... 19, 20, 39

35 U.S.C. § 305.................................................................. 20

35 U.S.C. § 306.................................................................. 20

35 U.S.C. § 307............................................................ 19, 20

35 U.S.C. § 311............................................................ 13, 39

35 U.S.C. § 311 (2009) ..................................................... 39

35 U.S.C. § 314 (2009) ..................................................... 21

35 U.S.C. § 315.................................................................. 31

35 U.S.C. § 316............................................................ 21, 32

35 U.S.C. § 318................................................ 12, 34, 35, 43

35 U.S.C. § 319.................................................................. 35

35 U.S.C. § 41 .................................................................... 23

35 U.S.C. § 6 ...................................................................... 18

Revenue Act of 1942, Pub. L. 753, Ch. 619, 56 Stat.

798 (Oct. 21, 1942) ....................................................... 43

6

Regulations

37 C.F.R. § 42.15(a).......................................................... 29

Other Authorities

AM. INTELLECTUAL PROP. LAW ASS’N, 2017 REPORT OF

THE ECONOMIC SURVEY (2017) ................................... 30

7

STATEMENT OF INTEREST OF AMICUS

CURIAE1

Lee A. Hollaar is a long-time commentator on

and actor in numerous aspects of the U.S. patent

system. He is an emeritus professor of computer

science in the School of Computing at the University

of Utah, where he taught courses in computer and

intellectual property law and computer systems and

networking. He has been programming computers

since 1964 and designing computer hardware since

1969. He received his B.S. degree in electrical

engineering from the Illinois Institute of Technology

in 1969 and his Ph.D. in computer science from the

University of Illinois at Urbana-Champaign in 1975.

Professor Hollaar was a Fellow with the Senate

Committee on the Judiciary and technical advisor to

its chair, Senator Orrin Hatch, and a visiting scholar

with Judge Randall R. Rader at the Court of Appeals

for the Federal Circuit. Professor Hollaar is the

author of Legal Protection of Digital Information,

which was first published in 2002 and is now in its

second edition.

Professor Hollaar supervised the filing of the

amicus curiae brief in Festo Corp. v. Shoketsu

Kinzoku Kogyo Kabushiki Co., 535 U.S. 722 (2002),

for IEEE-USA, whose theory of foreseeability was

adopted by this Court. Professor Hollaar also filed

an amicus curiae brief on his own behalf in Metro-

1 In accordance with Supreme Court Rule 37.6, no counsel to a

party authored or edited this brief in whole or in part. No

person other than Professor Hollaar and his counsel made a

monetary contribution to the preparation or submission of this

brief. Petitioners and Respondent have consented to the filing

of this brief, and their consents have been filed with the Court.

8

Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 545

U.S. 913 (2005), where the theory of inducement

liability described in Professor Hollaar’s brief was

also adopted by this Court.

As an inventor and patentee of computer-

implemented technology, a Registered Patent Agent

involved with the prosecution of patent applications

since 1989, and an expert witness, consultant, and

special master in patent litigation and post-grant

review, Professor Hollaar has been in a position to

see from all sides how the present examination

system operates and the need for a mechanism to

reassess the validity of issued patents by the U.S

Patent and Trademark Office (“PTO”).

SUMMARY OF THE ARGUMENT

This brief brings to the attention of the Court

five issues not discussed by the parties that may be

of considerable help to the Court in assessing the

constitutionality of inter partes review.

First, the question on which certiorari was

granted and Petitioner’s related discussion are

misleading in important respects, including the

inaccurate suggestion that Article III courts do not

provide substantial oversight in inter partes reviews.

Second, the very patent rights that Petitioner

seeks to champion contain as explicit statutory

limitations the administrative procedures that

Petitioner decries. Petitioner has not and cannot

demonstrate that Congress is incapable of

establishing a system in which patents are subject to

post-issuance administrative review.

9

Third, through the 1952 Patent Act and

subsequent amendments, Congress has established a

complex patent system that balances many

competing interests in order to calibrate the effects of

patent law on innovation. To address the inherent

limitations of ex parte patent examination, Congress

has established various administrative proceedings

that allow the PTO to correct its mistakes, often by

yoking the adversarial process for public benefit.

This Court has previously expressed reluctance to

alter Congress’s complex design in a piecemeal

fashion, and this case is another instance when that

wisdom should be heeded.

Fourth, Petitioner is tellingly silent on the

specific relief requested, and closer inspection reveals

that much of the devil is in the details. Even if the

Court were to agree that inter partes review conflicts

with Article III, uncertainty remains regarding the

appropriate remedy. Petitioner also fails to

recognize that this Court has previously held

constitutional the prospective use of administrative

procedures leading to the cancellation of intellectual

property rights. Petitioner has not limited its

arguments to the retroactive application of inter

partes review and has therefore waived any such

arguments. Even if Petitioner had properly raised

this issue, inter partes reviews are constitutionally

indistinguishable from administrative procedures

that have existed since at least 1980.

Finally, even if this Court were to rule in favor of

Petitioner, the justification and limits for such a

ruling must be clear so that Congress can determine

whether responsive statutory reforms are necessary.

10

ARGUMENT

I. The question on which certiorari was

granted is misleading.

Petitioner requested and obtained review for the

following question:

Whether inter partes review—an

adversarial process used by the Patent

and Trademark Office (PTO) to analyze

the validity of existing patents—violates

the Constitution by extinguishing

private property rights through a non-

Article III forum without a jury.

This question, however, is misleading in three

respects.

First, despite Petitioner’s suggestion to the

contrary, Article III courts already play a critical role

in the invalidation of granted patents through inter

partes review. Pet. Br. at 17. Following a

determination by the PTO’s Patent Trial and

Appeals Board that a granted patent is invalid, a

patent owner may appeal that decision to the U.S.

Court of Appeals for the Federal Circuit, an Article

III court. If dissatisfied with the results in that

court, a patent owner may seek review in this Court.

Indeed, Petitioner has relied on both of these Article

III courts in this case. In fact, the PTO cannot

actually invalidate a patent in an inter partes review

until any appeal of that proceeding concludes. See 35

11

U.S.C. § 318(b).2 In this case, for instance,

Petitioner’s patent is still valid.

Importantly, the oversight provided by these

Article III courts is substantial, as many of the issues

from an inter partes review are considered by a

reviewing court de novo. For instance, a key

consideration to many decisions in inter partes

reviews is the construction of the terms of the patent

claims. As this Court has held, “the construction of a

patent, including terms of art within its claim, is

exclusively within the province of the court.”

Markman v. Westview Instruments, Inc., 517 U. S.

370, 372 (1996).

Consequently, claim constructions are ultimately

reviewed de novo by the Federal Circuit regardless of

whether the initial claim construction was done by

the Patent Trial and Appeals Board or an Article III

district court. Teva Pharm. USA, Inc. v. Sandoz,

Inc., 135 S. Ct. 831, 840 (2015) (district court

disputes); In re Cuozzo Speed Techs., LLC, 793 F.3d

1268, 1280 (Fed. Cir. 2015), aff’d sub nom. Cuozzo

Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016)

(inter partes review).3 Likewise, obviousness, which

is a key ground for invalidation in inter partes

review is an issue of law subject to de novo review.

Graham v. John Deere Co., 383 U.S. 1, 17 (1966).

2 Any cancellation certificate will not issue until “after the time

for appeal [to the Federal Circuit] has expired or any appeal has

terminated.” 35 U.S.C. § 318(b). 3 Claim constructions can in some cases be premised on issues

of fact, which are reviewed for “clear error” in appeals from

district court disputes and “substantial evidence” in appeals

from the post-grant proceedings in PTO. Teva Pharm. USA,

135 S. Ct. at 840 (district court disputes); In re Cuozzo Speed

Techs., 793 F.3d at 1280 (inter partes reviews).

12

Inter partes reviews do involve some issues of

fact, such as the scope and content of prior art and

issues of novelty. Graham, 383 U.S. at 17; HP Inc. v.

MPHJ Tech. Inv., LLC, 817 F.3d 1339, 1343 (Fed.

Cir. 2016). These issues are evaluated by the

Federal Circuit under a more deferential “substantial

evidence” standard. Id. Nevertheless, even for these

factual issues, the Federal Circuit provides

substantial review because the Federal Circuit can

perform analyses that are nearly identical to those of

the PTO.

For instance, the factual record from an inter

partes review is particularly amenable to appellate

review because the invalidity challenges in those

proceedings can only be based on “patents or printed

publications.” 35 U.S.C. § 311(b). Unlike factual

records containing extensive testimony regarding the

use or sale of inventions, the Federal Circuit can

thus evaluate the scope and content of the prior art

directly on appeal and provide substantial oversight

to the PTO even under a deferential standard of

review.

Similarly, although novelty under § 102 is an

issue of fact, such an invalidity finding relies only on

a comparison between the teachings of a patent or

printed publication and the construed patent claims.

The Federal Circuit thus provides significant

appellate oversight.

The second reason that Petitioner’s framing of

this appeal is misleading is that petitioner

apparently concedes that the PTO can invalidate

issued patents if issues of fact are reviewed de novo.

For instance, Petitioner tries to distinguish inter

partes review from the interference proceedings that

were added to the Patent Act in 1952 on the grounds

13

that “[i]nterference proceedings could be appealed as

of right to either a federal district court (for a full

trial, including plenary trying of facts).” Pet. Br. at

5. Yet Petitioner has not argued that issues of fact in

inter partes review should be reviewed de novo on

appeal nor has Petitioner identified any other aspect

of inter partes review that should be adjusted to

comply with the Constitution.

Petitioner implicitly takes the more radical

position that any adversarial proceedings in the PTO

to invalidate issued patents always violate the

constitution.4

Finally, the question suggests and Petitioner

explicitly asserts that inter partes reviews are

identical to the validity disputes heard in district

courts. Pet. Br. at 22-23, 27. This purported

equivalence between district court proceedings and

inter partes review is false.

In district court litigation, invalidity is an

affirmative defense to a charge of patent

infringement. 35 U.S.C. § 282(b). As a result,

following a successful challenge to the validity of an

asserted patent, a district court will not hold a

defendant liable for patent infringed. But the court

will not somehow cancel the patent.

Indeed, this Court implicitly recognized that

courts do not “extinguish” patent rights in Blonder-

Tongue Laboratories, Inc. v. University of Illinois

Foundation, 402 U.S. 313 (1971). There, the Court

held that a finding by one court that a patent was

4 Such a change in the standard of review would put the PTO on

similar footing as a magistrate judge or special master, which

are commonly employed by Article III courts in patent disputes.

The amicus curiae submitting this brief has served as a special

master in patent cases.

14

invalid will have collateral estoppel effect in

subsequent disputes brought against different

alleged infringers provided that the patent owner

had a full and fair opportunity to respond to the

invalidity defense. Id. at 330. In reaching this

decision, the Court overturned its previous decision

in Triplett v. Lowell, 297 U.S. 638 (1936). Such a

reversal of existing Supreme Court precedent in

favor of collateral estoppel would have been entirely

unnecessary if a district court could “extinguish” a

patent through adjudication.5

Admittedly, in one practical respect the effect of

collaterally estopping a patent owner from disputing

validity and of the PTO cancelling the claims of a

patent are similar: In either case, the patent owner

is unable to assert patent rights against an accused

infringer. Nevertheless, the mechanisms for

reaching this result reveal the fundamental

differences in these two processes. In a patent

infringement suit, invalidity is a defense. In an inter

partes review, the PTO revisits its initial decision of

patentability assisted by an adversarial process.

While an inter partes review may render district

court litigation unnecessary, it cannot be said that

5 A patent challenger can initiate a lawsuit regarding the

validity of an issued patent in federal courts through the

Declaratory Judgment Act, but such a dispute would not lead to

the cancellation of a patent. The Supreme Court recently

analyzed the effects of declaratory judgments in patent cases in

Medtronic, Inc. v. Mirowski Family Venture, LLC, 134 S. Ct.

843 (2014). There, the court noted that “the operation of the

Declaratory Judgment Act … [is] only procedural, leaving

substantive rights unchanged.” Id. at 849. Thus, as in

infringement cases brought by a patent owner, in a declaratory

judgment action regarding patent invalidity a court simply

determines whether an affirmative defense applies.

15

inter partes review duplicates in the PTO a dispute

from Article III courts that “extinguish[es] private

property rights.”

II. Patent rights inherently contain the

same limitations Petitioner contends

conflict with patent protection.

Petitioner and many of the amici supporting it

spend a great deal of time discussing patent law as it

was in England centuries ago, particularly whether

the rights of a patentee are “private” or “public”

rights. But as part of the revision and codification to

the patent statutes by the Patent Act of 1952,

Congress replaced many of the common law patent

doctrines with statutory language that is more

important to resolving the instant dispute. Pub. L.

82-593, 66 Stat. 792. In short, the same rights that

Petitioner seeks to champion contain the limitations

that it decries.

a. Congress set forth a

patentee’s rights in § 261, and

they are subject to the other

provisions of Title 35.

Section 261 sets forth the property rights of a

patentee. While much of that section deals with

assignments and other transfers of patents, its first

sentence provides a general statement of those

rights:

Subject to the provisions of this title,

patents shall have the attributes of

personal property.

The second part of the sentence says that patents

are not identical to personal property, but only have

16

some of its attributes. More importantly, Petitioner

and many of the amici who cite § 261 omit the

“[s]ubject to the provisions of this title” limitation on

the rights when they quote that section.6

Whatever the rights granted by a patent may be,

§ 261 makes clear that those rights are subject to the

other provisions of Title 35. Importantly, Title 35

includes numerous administrative limitations on

patent rights.

b. Title 35 establishes

cancellation through

administrative proceedings

with review by Article III

courts.

For sixty-five years, Congress has established

various administrative procedures in the PTO that

as described in the Question Presented can be used

to “extinguish[] private property rights through a

non-Article III forum without a jury.”

Congress created the first such administrative

procedure in the Patent Act of 1952. Before 2013,

U.S. patent law granted patent rights to the first

inventor to discover an invention.7 In some cases,

however, two inventors independently discovered the

same invention and both sought patent protection. 6 One amicus curiae brief only quotes the word “property” from

Section 261 and then goes so far as to claim that because that

term was used “Congress explicitly endorsed [the past] case

law ....” Brief of 27 Law Professors at 3. 7 In 2011 Congress passed the Leahy-Smith America Invents

Act, Pub. L. No. 112-29, 125 Stat. 284 (2011), so that today

patents issue to the first inventor to apply for patent protection

even if that first-to-file inventor discovered the invention second

in time.

17

In such a situation, one of the inventors could

request that the PTO initiate so-called “interference

proceedings” to decide which inventor invented first

and therefore should receive a patent. 35 U.S.C. §

135 (2009).8 These adversarial proceedings were

heard by administrative patent judges who were

members of an administrative judicial body within

the PTO known as the Board of Patent Appeals and

Interferences (BPAI). 35 U.S.C. § 6 (2009). A decision

in an interference could be appealed to a district

court or a federal appellate court. 35 U.S.C. §§ 141,

146; Kappos v. Hyatt, 132 S.Ct. 1690, 1697-98 (2012).

In some cases, interference proceedings were

brought while two conflicting patent applications

were pending, but interferences oftentimes were

brought after a patent had issued and while a

conflicting application was pending. Until the Patent

Act of 1952, however, the PTO could not actually

cancel an issued patent in an interference

proceeding. Instead, cancellation required a

separate district court proceeding. Act of July 8,

1870, ch. 230, § 58, 16 Stat. 200. In revising the

patent laws in 1952, Congress changed this so that

resort to a court was no longer necessary:

A final judgment adverse to a patentee

from which no appeal or other review

has been or can be taken or had shall

constitute cancellation of the claims

involved from the patent, and notice

thereof shall be endorsed on copies of

8 35 U.S.C. § 135 was replaced with the “derivation proceedings”

of the Leahy-Smith America Invents Act. Pub. L. No. 112-29,

125 Stat. 284 (2011).

18

the patent thereafter distributed by the

Patent Office.

35 U.S.C. § 135(a) (emphasis added).

Significantly, when the patent in this case

issued, interference proceedings were already

established under Title 35, and the rights under that

patent were thus “subject to” this form of

administrative cancellation. Petitioner strives to

distinguish interference proceedings from inter

partes review by arguing that “[i]nterference

proceedings could be appealed as of right to either a

federal district court (for a full trial, including

plenary trying of facts).” Pet. Br. at 5. Petitioner

does not dispute, however, that the PTO had the

power to invalidate a granted patent without any

involvement from an Article III court.

Post-grant interferences provided patent review

only in the limited circumstance of a conflict between

two inventors, and in 1980 Congress therefore

created a second administrative procedure with the

power to invalidate issued patents in other contexts:

ex parte reexamination. Act of December 12, 1980

(Bayh-Dole Act), Pub. L. No. 96-517, ch. 30, 94 Stat.

3015 (1980). This procedure allows for the

reexamination of an issued patent on the basis of

“patents or printed publications” that create a

“substantial new question of patentability.” See 35

U.S.C. §§ 301, 303. Ex parte reexaminations can be

instituted by the request of either the patent owner

or a third party. Id. § 302.

While ex parte reexamination can result in the

confirmation of the validity of the patent in light of

the newly-considered prior art, the PTO may also

19

cancel the claims in appropriate cases. Id. § 307.

Cancellation is by PTO administrative action only

after any review by the Court of Appeals for the

Federal Circuit has been completed. Id. § 307(a). If

no such appeal takes place, the PTO can cancel a

patent without any involvement by an Article III

court.

Ex parte reexamination proved useful for a

patent owner who was concerned about the issued

claims of a patent in light of newly-discovered prior

art, but it was of little value to a third party who

knew of invalidating prior art for an issued patent.

For instance, even after a third party convinced the

PTO to initiate an ex parte reexamination, those

proceedings would take place using the same ex

parte procedures used in the initial examination of a

patent application. Id. § 305.9 A third party also

could appeal neither a determination by the PTO

that the submitted prior art did not raise a

“substantial new question of patentability” nor the

final decision of the examiner in the reexamination.

Id. §§ 303(c), 306.

Recognizing this problem, in 1999 Congress gave

the reexamination requestor the opportunity to play

a larger role by adding to Title 35 a third

administrative procedure for invalidating issued

patents: inter partes reexamination. American

Inventors Protection Act of 1999, Pub. L. No. 106-

9 A third party could submit in any examination prior art and

an explanation of the “pertinency and manner of applying such

prior art to at least one claim of the patent.” 35 U.S.C. § 301.

Such a third party would not, however, have an opportunity

otherwise to participate in the examination, such as by

responding to an office action.

20

113, 113 Stat. 1501 (codified in relevant part in 35

U.S.C. §§ 311–318 (2006) and repealed in 2012). Like

ex parte reexamination, before instituting an inter

partes reexamination, the PTO had to determine

that the prior art to be considered raised a

substantial new question of the validity of the

patent. Once an inter partes reexamination was

started, however, the requesting third party was

allowed to comment on any points made by the

patent owner when they were submitted to the

examiner.

As with interferences and ex parte

reexamination, the potential result of an inter partes

reexamination included the administrative

cancellation of claims of issued patents, but only

after any appeal to the Court of Appeals for the

Federal Circuit concluded. See 35 U.S.C. § 316(a).10

In 2011, Congress passed the Leahy-Smith

America Invents Act, which replaced inter partes

reexamination with the inter partes review being

considered by this Court. Leahy-Smith America

Invents Act, Pub. L. No. 112-29, §§ 6, 18, 125 Stat.

284 (2011). While the particular features of inter

partes review and inter partes reexamination differ,

both administrative proceedings allow third parties

to present arguments and evidence regarding

patentability and give the PTO the power to cancel

10 Inter partes reexamination did not apply retroactively.

Instead, these adversarial procedures “appl[ied] to any patent

that issue[d] from an original application filed in the United

States on or after” November 29, 1999. Pub. L. No. 106-113, §

4608. The patent in this dispute issued from an application

filed August 12, 1999, so that this patent could not have been

the subject of an inter partes reexamination.

21

issued patents. 35 U.S.C. § 316(a); id. § 314(b)(2)

(2009).

In the same 2011 Act, Congress also created a

new administrative procedure for challenging the

validity of issued patents called “post-grant review.”

Id. §§ 321-329. Challengers in post-grant reviews

may assert broader grounds for disputing

patentability than in inter partes review, but post-

grant review can only be initiated within nine

months of the issuance of a patent. Id. § 321.

Moreover, post-grant review does not apply

retroactively to patents effectively filed before March

2013. Pub. L. No. 112-29 § 6(f)(2)(A).

c. Congress can provide that

patents issue with

administrative claw-back

provisions.

The U.S. Constitution grants Congress the power

“To promote the Progress of Science and useful Arts,

by securing for limited Times to Authors and

Inventors the exclusive Right to their respective

Writings and Discoveries.” U.S. Const. Art. I, § 8, cl.

8. The Constitution does not, however, require that

Congress exercise this power. As a result, because

Congress could choose not to grant patent protection

it can also choose to grant patents subject to post-

grant administrative review.

Petitioner’s extensive discussion of long-dead

patents issued under long-dead laws is thus

irrelevant.

22

d. Patentees choose to elect

patent protection that

includes limitations,

including those Petitioner

now attacks.

Inventors are not forced to request patent

protection. Indeed, in many cases, inventors can opt

for alternate forms of intellectual property to protect

their discoveries, such trade secrecy. When

inventors pursue patent protection, however, they do

so under the terms set by Congress and the PTO,

including many limitations on the patent rights

those inventors seek.

For instance, patent protection generally lasts

only twenty years from the date of filing—even for

inventions that provide substantial benefit to society

for a much longer time period. 35 U.S.C. § 154.

Congress also insists that inventors publicly disclose

substantial amounts of information in order to obtain

patent protection. Id. § 112 (requiring a patentee to

describe the invention “in such full, clear, concise,

and exact terms as to enable any person skilled in

the art to which it pertain, or with which it is most

nearly connected, to make and use the same”).

More importantly, inventors seek patent

protection knowing that those rights are subject to

obligations that extend beyond the application stage

to granted patents. For instance, eleven years and

six months after the grant of a patent the PTO will

charge the patentee $4,110. Id. § 41(b)(1). If a

patentee fails to pay such “maintenance” fees, an

issued patent will expire.

Patents obtained by private entities operating

under federal contracts may also be subject to

additional post-grant limitations. Specifically, the

23

Patent Act grants federal agencies so-called “march-

in” rights” under which those agencies may, in

appropriate circumstances, require the patent owner

to grant a license to the patent to appropriate

“responsible” third parties. Id. § 203(a). In fact, if

the patent owner refuses to grant such a license, the

relevant federal agency can grant the license

directly. Id.

Critically, patent owners today voluntarily

request patent protection subject to the

administrative procedures that Petitioner now

attacks. For instance, since at least 1980, patentees

have chosen to request patent protection knowing

that issued patents could be invalidated if the PTO

determined that there was a “substantial new

question of patentability.”11

Having chosen patent protection, patent owners

cannot seek to change the terms of the rights they

acquire.

III. This Court should not disturb

Congress’s calibration of patent law.

This Court has “more than once cautioned that

courts should not read into the patent laws

limitations and conditions which the legislature has

not expressed.” Diamond v. Diehr, 450 U. S. 175, 182

(1981) (internal quotation marks omitted).

11 The patent at issue in this dispute issued from an application

filed before inter partes reexamination or inter partes review

were added to the Patent Act. However, inter partes reviews

are constitutionally indistinguishable from the ex parte reviews

that existed long before Petitioner sought patent protection.

Moreover, Petitioner has not raised any issues of retroactivity,

and the Court should not now reach them. See infra Part IV.a

(discussing issues related to retroactivity).

24

Petitioner asks the Court to ignore this basic

principal of patent law and to read additional non-

statutory limitations and conditions into patent law.

a. Because examination is an

inherently imperfect process,

there is a need to review a

patent based on information

not available to the examiner.

For practical reasons, Congress established the

administrative procedures to review the validity of

issued patents, including interferences, ex parte

reexaminations, inter partes reexaminations, inter

partes reviews, and post-grant reviews. Examination

is an inherently imperfect process because it is often

impossible for an examiner to possess all of the

relevant information at the time of examination.

For example, in the case of interferences the

examiner had no way of knowing whether a third

party may have discovered the invention before the

patent applicant. Likewise, an examiner often

cannot locate all of the prior art relevant to

patentability. See, e.g., In re Hall, 781 F.2d 897 (Fed.

Cir. 1986) (holding that a German doctoral thesis

was “printed publication” prior art).

This Court has previously recognized the

problem of the examiner not having all prior art

references available, particularly for the examination

of software-based inventions:

The Patent Office now cannot examine

applications for programs because of a

lack of a classification technique and

the requisite search files. Even if these

were available, reliable searches would

25

not be feasible or economic because of

the tremendous volume of prior art

being generated. Without this search,

the patenting of programs would be

tantamount to mere registration and

the presumption of validity would be all

but nonexistent.

Gottschalk v. Benson, 409 U.S. 63, 72 (1972) (quoting

To Promote the Progress of Useful Arts, Report of the

President’s Commission on the Patent System (1966)).

Problems with examination also exist when the

examiner tries to interpret the claims being made in

an application. With rapidly changing technology,

the meaning of some terms in a claim may not be

clear. Also, claim elements described in functional

terms cover not only what is described in the

specifications, but also its “equivalents.” 35 U.S.C.

§ 112(f).12 In many cases, it is difficult if not

impossible for an examiner to precisely delineate the

scope of equivalents disclosed in the specification.

This problem of interpretation may be resolved in

patent litigation, but the process can be extremely

complex, time consuming, and expensive. See

Markman v. Westview Instruments, Inc., 517 U. S.

370 (1996).

In creating post-grant administrative

proceedings, Congress sought to empower the PTO to

correct its unavoidable mistakes.

12 This is another instance where the Patent Act of 1952

replaced past court decisions, such as Halliburton Oil Well

Cementing Co. v. Walker, 329 U. S. 1 (1946), with statutory

language.

26

b. Congress has chosen inter

partes review over other

approaches that would hurt

applicants and holders of

valid patents.

If the Court were to rule that Congress could not

address the inherent imperfections of examination

through post-grant procedures, Congress might be

forced to embrace even less desirable alternatives to

address the problem of incorrectly granted patents.

Such a solution could be far worse for patentees that

the current inter partes review.

For example, Congress could replace the current

system of a potentially-flawed examination with a

system of substantially more rigorous examination to

reduce (but never eliminate) the number of patents

that are incorrectly granted. But since patent

examinations are completely fee-supported, that

would result in substantially higher application

costs. H.R. Rep. 109-372, at 5 (2005). This new

expense would hurt many inventors, including those

with simple inventions as well as those with complex

but undeniably novel inventions. Expanded

examination procedures would also likely result in

higher attorney costs for applicants, and the time for

processing each patent application by examiners

would likely increase as well.

Increased costs and delay would most likely

result in fewer patent applications, reducing the

capacity of patents to encourage both invention and

public disclosure of those discoveries. Undermining

these incentives may have far reaching effects,

particularly in complex and rapidly-developing areas

such as software-based systems and Internet

27

applications. In those areas of technology, the PTO’s

collection of pending applications and issued patents

may be the best source of prior art, because each

reference is manually classified by an examiner into

appropriate categories.13

Reductions in the number of applications thus

may make it more difficult to keep the PTO

collections up-to-date, negating some of the desired

benefits of having a more rigorous examination as a

way of reducing the number of incorrectly-granted

patents.

Another approach Congress could take (but has

not) would be to have a pre-grant opposition period,

perhaps at the time that the examiner has

determined that a patent is allowable based on the

prior art he or she has found. This procedure could

be similar to the opposition period for trademarks.

See 15 U.S.C. § 1063. But that approach would also

increase pendency for applications in the PTO. Such

a system also might be subject to gaming as a way to

keep a patent from issuing in a timely fashion,

something important with fast-moving technologies.

Instead, Congress has determined that the most

efficient approach is to do a reasonable examination

of each patent but provide an additional procedure to

address the few patents where a new question of

patentability has been raised.

Congress could consider still more drastic

approaches to ameliorating the inherent deficiencies

13 When patents of software-based inventions were first

granted, they were put in only two subclasses of the general

digital computing class. Today, there are dozens of subclasses

for database techniques alone.

28

of examination. Congress could exclude from the

presumption of validity any prior art dissimilar from

that considered by the examiner. 28 U.S.C. § 282(a).

Even more drastically, Congress could eliminate the

clear-and-convincing presumption of validity

altogether. See Microsoft Corp. v. i4i Ltd.

Partnership, 564 U. S. 91 (2011). Such a change

would likely hurt some holders of patents by

complicating infringement actions and substantially

impairing efforts to enforce those rights.

c. The “bugs” claimed by the

critics of inter partes review

are features of patent law

created by Congress.

Petitioner and other critics characterize inter

partes review as improperly undermining patent

rights. Pet. Br. at 48. However, these alleged

problems are not indicative of Congressional

mistake. Rather, they are part of the system

designed by Congress. As the saying goes in

computer programing, these are not “bugs”; they are

“features.”

One alleged problem claimed by the critics of

inter partes review is that they invalidate a high

percentage of reviewed patents, perhaps as high as

80 percent. This result, however, is unsurprising for

three reasons.

First, as mentioned above, inter partes review

will only be initiated after the PTO has determined

that there is a “reasonable likelihood that the

petitioner would prevail.” 35 U.S.C. § 314(a). The

only inter partes reviews that are conducted thus

will involve a preliminary determination by the PTO

29

that the challenge may succeed, thereby screening

out cases involving patents on more innovative

inventions.

Second, inter partes review is far more likely to

be requested when it is likely that the claims in issue

are invalid. To request an inter partes review, a

challenger must pay a fee of $9,000 plus $200 for

every claim to be considered beyond twenty. 37

C.F.R. § 42.15(a). If the request is granted, an

additional fee of $14,000 plus $400 for every claim

beyond twenty has to be paid before the review is

instituted. Id. Attorney’s fees for inter partes review

are even greater, averaging $124,000 for the drafting

of a petition to start an inter partes review to

$325,000 for representation through to a full

hearing. AM. INTELLECTUAL PROP. LAW ASS’N, 2017

REPORT OF THE ECONOMIC SURVEY, at I-162 (2017).

These costs create strong incentives not to bring

reviews that are unlikely to succeed.

Third, challengers are also reluctant to pursue

inter partes review on weaker grounds due to

collateral effects on requestors if they do not prevail:

The petitioner in an inter partes review

of a claim in a patent under this chapter

that results in a final written decision

under section 318(a), or the real party

in interest or privy of the petitioner,

may not assert either in a civil action

arising in whole or in part under section

1338 of title 28 or in a proceeding before

the International Trade Commission

under section 337 of the Tariff Act of

1930 that the claim is invalid on any

ground that the petitioner raised or

30

reasonably could have raised during

that inter partes review.

35 U.S.C. § 315(e)(2).

In other words, if the PTO institutes an inter

partes review but does not invalidate a claim, the

challenger cannot use in any later infringement

dispute both the prior art that formed the basis of

the inter partes review and also any other grounds

for invalidating the patent that they could have

reasonably raised in the inter partes review. These

estoppel provisions are thus another reason that

patent challengers will limit their requests for inter

partes review to those cases where the chances of

invalidation are high.

Another critique levied against inter partes

review is that the PTO is reluctant to allow

amendments to the claims that might overcome the

prior art that is being considered. This attack on

inter partes review, however, is simply a feature of

these proceedings, not indicative of a problem.

To start, the possibility of amendment

demonstrates that inter partes review provides

patent owners with greater flexibility than district

court litigation in that amendment of claims is not

allowed in litigation. If a claim is proven invalid in

district court, the patent owner has no opportunity to

amend it.14 In contrast, a patent infringement action

14 The only hope for a patentee who is presented with

invalidating prior art in litigation is to request a stay in

the proceedings before the court, request an ex parte

reexamination by the PTO in light of that prior art, and

hope that during the reexamination proceeding a claim

amendment will be allowed that avoids the prior art.

31

is only brought when the patent owner has a

comparatively high expectation that the patent

claims will be upheld, since such a suit puts the

patent at risk.

Because of this substantial difference between

when inter partes review is sought and a patent is

asserted in litigation, comparing the percentage of

patents that are invalidated is like comparing apples

and oranges.

Moreover, critics of inter partes review fail to

recognize the unavoidable problems that arise when

a patent owner seeks to amend claims in an inter

partes review. By congressional design, the final

determination in an inter partes review must

normally be issued by the PTO not later than one

year after the date on which the review is instituted.

35 U.S.C. § 316(a)(11). This deadline leaves little

time for lengthy amendment proceedings,

particularly since amendment of a claim will only be

allowed if it preserves the validity of the claim,

requiring additional analysis by the PTO in a limited

timeframe.

Liberally allowing amendment of claims during

inter partes review would also act as a disincentive

for challengers to use this procedure to dispute the

validity of issued patents. In some cases, an

amendment might avoid the prior art asserted in an

inter partes review only to run afoul of other

unasserted prior art. Because of the estoppel

provisions noted above, a challenger might be

prevented from later asserting that prior art against

the amended patent. To avoid this problem, patent

challengers might have to submit voluminous and

likely duplicative prior art. Challengers might fear

32

that they would be far better off in litigation, where

the patentee cannot amend to avoid that prior art.

In establishing inter partes review, however,

Congress sought to encourage the correction of

patent mistakes by the PTO, not to create a system

where disputes simply continued to be fought in the

district courts.

IV. Petitioner has failed to address and

thus waived important issues related

to its case.

a. Petitioner has not specified

what portion of Title 35 is

unconstitutional.

If the Court were to find for Petitioner, it should

strike only the portions of the Patent Act that are

unconstitutional and leave other portions of the

statute intact, unless such “[p]artial invalidation

…[would be] contrary to legislative intent.” Brockett

v. Spokane Arcades, Inc., 472 U.S. 491 (1985).

However, Petitioner has failed to identify which

provisions of the Patent Act are actually

unconstitutional, simply stating in broad terms that

“inter partes review violates the Constitution.” Pet.

Br. at 58. Unfortunately, even if inter partes reviews

violate Article III, there are at least five approaches

to addressing such a constitutional defect.

Petitioner’s discussion of interference

proceedings suggests a first approach that the Court

might take if it were to find that inter partes reviews

violate Article III. Petitioner apparently concedes

that interference proceedings did not violate Article

III because a patent owner who lost in the PTO could

33

“appeal[] as of right to … a federal district court …

for a full trial, including plenary trying of facts.” Pet.

Br. at 5. If the Court were to accept Petitioner’s

arguments, one approach would therefore be to strike

the portions of the Patent Act that prevent such

plenary appeals to district courts.

Such a result, however, could not be achieved by

striking language from the Patent Act as it is

currently written. Today, the Act contains only two

sections that provide for plenary district court

proceedings. To start, an applicant can bring a civil

action regarding the PTO’s denial of a patent

application under § 145. Similarly, under § 146, an

interested party can initiate a civil action regarding

a so-called “derivation proceeding,” which is the

analogue of interference proceedings but modified to

suit a first-to-file system.15 Neither of these

provisions contains text that could be stricken to

create a district court action providing plenary

review for inter partes review. Instead, additional

language would need to be inserted into the Patent

Act, which is the purview of Congress and not this

Court.

As a result, a second and more likely approach to

addressing the alleged unconstitutionality of inter

partes review might be strike the part of the Patent

Act empowering the PTO to cancel patents in an

inter partes review, that is, 35 U.S.C. § 318(b):

If the Patent Trial and Appeal Board

issues a final written decision under

subsection (a) and the time for appeal

has expired or any appeal has

15 See note 8 supra (describing derivation proceedings).

34

terminated, the Director shall issue and

publish a certificate canceling any claim

of the patent finally determined to be

unpatentable, confirming any claim of

the patent determined to be patentable,

and incorporating in the patent by

operation of the certificate any new or

amended claim determined to be

patentable.

If this provision were deleted from the Patent Act,

the PTO would still issue a “final written decision

with respect to any patent claim challenged by the

petitioner,” but that decision would not result in the

patent being cancelled. 35 U.S.C. § 318(a).

It is not clear, however, that striking § 318(b)

alone would conform to congressional intent, leading

to a third potential remedy if the Court were to find

for Petitioner. For example, § 319 grants a right of

appeal to “[a] party dissatisfied with the final written

decision of the Patent Trial and Appeal Board” in an

inter partes review. However, if the Court were to

strike § 318(b), thereby preventing the PTO from

cancelling patents in inter partes reviews, a final

written decision by the PTO would be largely

advisory in nature. Appeals in inter partes reviews

therefore might not be constitutionally reviewable

“Cases” or “Controversies” for the Federal Circuit on

appeal, and the Court might therefore be required to

strike § 319 as well.

Fourth, faithful adherence to congressional

intent might require the Court to delete from the

Patent Act the entirety of Chapter 31. If the Court

were to strike § 318(b) and § 319, inter partes

reviews might still be useful in that they would

35

provide an independent determination of

patentability by a knowledgeable body and thus help

a patent owner decide whether to bring an

infringement action. But such a recasting of inter

partes review as advisory likely would conflict with

Congressional intent. By providing the PTO with the

power to cancel patents, Congress intended to create

a system for correcting mistakes at the PTO, not a

system for simply discussing mistakes in detail.

Fifth, if the Court were to strike Chapter 31 in

its entirety, it might also need to strike Chapter 32

(§§ 321 through 329) regarding post-grant review,

which provides another avenue for post-grant

invalidation of issued patents.16

The elimination of Chapters 31 and 32, in turn,

might require additional changes to the Act given

that the Patent Act contained no severability clause.

To the contrary, as described above, Congress has

created an interconnected system of patent law, so

that selectively eliminating major portions of this

system would distort Congress’s legislative design.

Furthermore, and perhaps most importantly, the

Patent Act explicitly states that the patent rights

designed by Congress depend up on the entire

statutory structure of Title 35. Specifically, the Act

states that patent rights are “[s]ubject to the

provisions of this title.” 35 U.S.C. § 261. Having

explicitly tied patent rights to the limitations

described in Title 35, a decision by this Court to

change fundamentally those limitations would thus

also redefine the “attributes” of patents, perhaps

16 See Part II.b supra (describing post-grant review).

36

requiring the Court to strike even broader swaths of

the Patent Act.

In short: Where do the dominos stop?

Despite the complexity and importance of these

issues, Petitioner has not briefed them. As a result,

even if the Court were to identify concerns regarding

the application of Article III to inter partes review,

Petitioner has waived any arguments addressing

which parts of the Patent Act should be stricken as

unconstitutional.

The Court should not decide such difficult

questions in an adversarial vacuum.

b. Petitioner has not addressed

whether its challenge is

limited to retroactive

applications of inter partes

review.

In addition to failing to identify which portions of

the Patent Act would be unconstitutional, Petitioner

has also failed to address whether its arguments

apply to all patents currently in force or whether

inter partes reviews are only unconstitutional when

applied retroactively. Issues of retroactivity may be

critical to the resolution of this dispute but are also

fraught with complexity, and the Court should not

decide these issues in the absence of briefing.

The Court has already held in another context

that, consistent with the Constitution, intellectual

property rights can be effectively invalidated by an

administrative agency so long as that invalidation is

not applied retroactively. In Ruckelshaus v.

Monsanto Co., the Court examined the

37

constitutionality of provisions of the Federal

Insecticide, Fungicide, and Rodenticide Act

(“FIFRA”) requiring pesticide manufacturers to

submit trade secrets to the Environmental Protection

Agency (“EPA”) and allowing the EPA to disclose

those trade secrets in certain contexts. 467 U.S. 986

(1984). Specifically, FIFRA requires a pesticide

manufacture to demonstrate that its product will not

cause “unreasonable adverse effects on the

environment.” Id. at 992 (internal quotation marks

omitted). Accordingly, when seeking EPA approval

to market their products, pesticide manufacturers

must disclose to the EPA trade secrets, including

“health, safety, and environmental data.” Id. at 994,

998. FIFRA provides that, subject to certain

conditions, subsequent applicants may rely on the

trade secrets already submitted to the EPA by a

manufacturer, even if those applicants compete with

that manufacturer. Id. at 994-95. Additionally, the

EPA may in certain contexts disclose trade secrets to

third parties. Id. at 994-96.

Monsanto, a pesticide manufacturer, challenged

these provisions of FIFRA as unconstitutional

takings of private property. Although the Court

agreed that Monsanto’s trade secrets were property

rights protected by the Fifth Amendment, the Court

also held that the challenged FIFRA provisions were

constitutional, at least regarding submissions made

after the enactment of the relevant provisions of

FIFRA. The Court noted that for those trade secrets

Monsanto was aware of and thus accepted the

consequences of applying for EPA approval. Id. at

1006-07. In response to Monsanto’s arguments that

the disclosure of trade secrets was an

“unconstitutional condition on a right to a valuable

38

Government benefit,” the Court held that “such

restrictions are the burdens we all must bear in

exchange for the advantage of living and doing

business in a civilized community.” Id. at 1007.

Thus, even if the Court were to find some

constitutional concerns with inter partes review,

Ruckelhaus requires that the Court limit its holding

to retroactive applications. Unfortunately, however,

identifying patents for which inter partes reviews

would be “retroactive” introduces additional legal

complexities because the Patent Act has long

contained administrative procedures for invalidating

issued patents. As noted above, issued patents have

been invalidated by the PTO through interference

proceedings since 1952, through ex parte

reexamination since 1980, and through inter partes

reexamination since 1999.

Indeed, in critical respects inter partes reviews

are indistinguishable from the PTO procedures that

existed at the time that inter partes reviews were

created. Most importantly, in ex parte

reexamination, inter partes reexamination, and inter

partes review, the PTO exercises a basic power to

correct its own mistakes: cancelling issued patents

that fail to satisfy the requirements of the Patent Act

on the basis of other patents or printed publications.

35 U.S.C. §§ 301, 303, 311(b); see also id. § 311(a)

(2009). Though Petitioner highlights certain

differences between these administrative procedures,

such as the adversarial nature of inter partes review

compared to ex parte reexamination, Petitioner does

not explain the significance of these differences.

While the various post-grant procedures provide

different mechanisms for the PTO to learn of its

39

mistakes, the PTO thereafter exercises the same

cancellation power that it has enjoyed at least since

ex parte reexaminations were created in 1980, if not

since 1952, when interference proceedings were

established. Petitioner has not explained why

differences in the means of identifying PTO mistakes

should limit the PTO’s power to correct them.

Thus, under Ruckelshaus inter partes review is

constitutional as applied to patents issuing from

applications filed since at least 1980, when Congress

gave the PTO the power to cancel issued patents.

Because Petitioner has not addressed issues of

retroactivity, including whether inter partes review

is constitutionally distinct from ex parte

reexamination, it has waived those issues, and the

Court should find in favor of the Respondent. At the

very least, even if the Court were to find for

Petitioner, it should ensure that its holding is

consistent with Ruckelshaus and allows for

appropriately prospective use of inter partes

review.17

17 If the Court were to determine that (1) inter partes review

and ex parte reexamination were constitutionally

distinguishable, but that (2) inter partes review and inter

partes reexamination were not, then it should hold that inter

partes review is available for all patents that issued from

applications filed after November 29, 1999. Because the normal

term of patent protection is twenty years from the date of filing,

such a holding would leave the vast majority of patents subject

to inter partes review, but would also support a finding in favor

of Petitioner, as the application for the patent at issue in this

case was filed in August 1999.

40

V. If the Court finds for Petitioner it

should provide clear guidance.

a. If necessary, the Court should

address the impact of a

finding for Petitioner on

other aspects of the Patent

System.

If the Court were to hold that the Constitution

mandates that only an Article III court can

invalidate an issued patent, it should also address

the impact of such a holding on additional features of

the Patent System. For example, a holding in favor of

Petitioner, if phrased in overbroad terms, might

impair the structure that Congress has set up for

handling alleged patent infringement by the United

States or one of its contractors because these

disputes are handled by a specialized Article I court,

not an Article III court.

It is well-settled that “[t]he United States, as

sovereign, is immune from suit save as it consents to

be sued, ... and the terms of its consent to be sued in

any court define that court’s jurisdiction to entertain

the suit.” United States v. Sherwood, 312 U. S. 584,

586 (1941). However, Congress has waived sovereign

immunity in patent cases by giving exclusive

jurisdiction in such instances to the Court of Federal

Claims.

Whenever an invention described in and

covered by a patent of the United States

is used or manufactured by or for the

United States without license of the

owner thereof or lawful right to use or

manufacture the same, the owner’s

41

remedy shall be by action against the

United States in the United States

Court of Federal Claims for the recovery

of his reasonable and entire

compensation for such use and

manufacture.

28 U.S.C. § 1498(a).

Importantly, the Court of Federal Claims is not an

Article III court.

The Court of Claims [now the Court of

Federal Claims] is a legislative, not a

constitutional, court. Its judicial power

is derived not from the Judiciary Article

of the Constitution, but from the

Congressional power “to pay the debts .

. . of the United States,” which it is free

to exercise through judicial, as well as

non-judicial, agencies.

Sherwood, 312 U.S.at 587.

A broad ruling by this Court in favor of

Petitioner may prevent the United States from being

able to assert invalidity defenses in the Court of

Federal Claims. Certainly, the waiver of sovereign

immunity that lies at the heart of that court and

allows that court to adjudicate patent infringement

disputes against the United States might also allow

that court to adjudicate invalidity defenses even if

the Court finds for Petitioner in this case. But the

Court of Federal Claims is still subject to

constitutional limitations, and a ruling in favor of

Petitioner would be based on constitutional grounds.

To avoid stripping the Court of Federal Claims of

its ability to fully adjudicate patent disputes against

42

the United States (and to avoid unnecessary

litigation on that issue), the Court should carefully

craft any decision in favor of Petitioner.

b. If necessary, the Court should

provide guidance to Congress.

Finally, if the Court were to find for Petitioner, it

should provide clear guidance regarding both the

portions of Title 35 that are unconstitutional and the

limits of that holding so that Congress can, if

appropriate, pass remedial legislation.

For example, Congress might respond to a

decision by this Court in favor of Petitioner by giving

an Article III court the power to issue the

cancellation orders currently provided by the PTO

under § 318(b). Alternatively, Congress might revise

inter partes review to allow for de novo review in the

district courts in a fashion similar to interference

proceedings. Congress can only make these changes,

however, if it the Court were to make clear the

details of any finding in favor of Petitioner.

In fact, careful guidance to Congress would also

be necessary if the Court were to find for the

Respondent because, in the future Congress may

seek to refine the capacity of the PTO to correct its

own errors. For instance, to provide the Patent Trial

and Appeals Board with greater autonomy, Congress

might seek to convert it into an Article I court, much

as it reconstituted the U.S. Board of Tax Appeals

into the Tax Court of the United States (now the

United States Tax Court). See Revenue Act of 1942,

§ 504(a), Pub. L. 753, Ch. 619, 56 Stat. 798, 957 (Oct.

21, 1942).

43

The decision in this could also go well beyond

patent law. A broad holding for Petitioner based on

its historical argument could allow any disgruntled

losing party to question the legitimacy of a decision

made by an Article I court or administrative

tribunal, even if reviewed by an Article III court,

leading to both uncertainty and wasteful litigation.

In the America Invents Act, Congress sought to

expand the power of the PTO to correct its errors.

Regardless whether Congress’s current approach

impinges upon Article III, Congress may in the future

be motivated to modernize the Patent Act in order to

better “promote the Progress of … [the] useful Arts.”

U.S. Const. Art. I. § 8, cl. 8. To best support those

efforts and avoid unnecessary confusion and

litigation, this Court should provide clear guidance.

CONCLUSION

Because Congress expressly limited the rights

granted by a patent, including being able to cancel

the patent based on new information brought to the

attention of the PTO, the judgment of the court of

appeals should be affirmed.

Respectfully submitted,

WILLIAM R. HUBBARD

Counsel of Record

WOMBLE CARLYLE SANDRIDGE

& RICE, LLP

1200 Nineteenth Street, NW,

Suite 500

Washington, DC 20036

(202) 857-4508

will.hubbard@wcsr.com

Counsel for Amicus Curiae